Exhibit 3.2
PLAINS AAP, L.P.
A Delaware Limited Partnership
SECOND AMENDED AND
RESTATED
LIMITED PARTNERSHIP
AGREEMENT
September 12, 2005
TABLE OF CONTENTS
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AMENDED AND RESTATED LIMITED
PARTNERSHIP AGREEMENT
OF
PLAINS AAP, L.P.
THIS AMENDED AND RESTATED LIMITED
PARTNERSHIP AGREEMENT (this “Agreement” )
of Plains AAP, L.P., a Delaware limited partnership (the
“Partnership ”), is made and entered into
as of this 8 th day of June, 2001 by and among Plains
All American GP LLC, a Delaware limited liability company, as the
general partner, and the Persons listed as limited partners in
Schedule I hereto (the “ Limited
Partners” ).
This Agreement amends and restates
in its entirety the original Limited Partnership Agreement dated as
of June 8, 2001 between General Partner and Plains All American
Inc.
ARTICLE I
DEFINITIONS
For purposes of this
Agreement:
“Acceptance
Notice” shall
have the meaning set forth in Section 7.8(b)
.
“Act” means the Delaware Revised Uniform Limited
Partnership Act, as amended from time to time.
“Adjusted Capital
Account Deficit” means, with respect to a Partner, the deficit
balance, if any, in such Partner’s Capital Account as of the
end of the relevant Taxable Year, after giving effect to the
following adjustments:
(a)
Credit to such Capital Account any amounts which such Partner is
obligated to restore pursuant to any provision of this Agreement or
is deemed to be obligated to restore pursuant to Regulation
Sections 1.704-1(b)(2)(ii)( c ), 1.704-2(g)(1) and
1.704-2(i)(5); and
(b)
Debit to such Capital Account the items described in Regulation
Sections 1.704-1(b)(2)(ii)( d )( 4 ),
1.704-1(b)(2)(ii)( d )( 5 ), and 1.704-1(b)(2)(ii)(
d )( 6 ).
“Affiliate”
means, with respect to any specified
Person, any other Person that directly, or indirectly through one
or more intermediaries, controls, is controlled by, or is under
common control with, such specified Person.
“Agreement”
means this Amended and Restated
Limited Partnership Agreement, as amended from time to time in
accordance with its terms.
“Available
Cash” means,
with respect to a fiscal quarter, all cash and cash equivalents of
the Partnership at the end of such quarter less the amount of cash
reserves that is necessary or appropriate in the reasonable
discretion of the General Partner to (a) provide for the
proper
SCHEDULE - I
conduct of the business of the Partnership
(including reserves for future capital expenditures and for
anticipated future credit needs of the Partnership) subsequent to
such quarter or (b) comply with applicable law or any loan
agreement, security agreement, mortgage, debt instrument or other
agreement or obligation to which the Partnership is a party or by
which it is bound or its assets or Property is subject; provided,
however, that disbursements made by the Master Limited Partnership
to the Partnership or cash reserves established, increased or
reduced after the expiration of such quarter but on or before the
date of determination of Available Cash with respect to such
quarter shall be deemed to have been made, established, increased
or reduced, for purposes of determining Available Cash, during such
quarter if the General Partner so determines in its reasonable
discretion.
“Business
” means all Hydrocarbon gathering, transportation,
terminalling, storage, and marketing and all operations related
thereto, including, without limitation, (a) the acquisition,
construction, installation, maintenance or remediation and
operation of pipelines, gathering lines, compressors, facilities,
storage facilities and equipment, and (b) the gathering of
Hydrocarbons from fields, interstate and intrastate transportation
by pipeline, trucks or barges, tank storage of Hydrocarbons,
transferring Hydrocarbons from pipelines and storage tanks to
trucks, barges or other pipelines, acquisition of Hydrocarbons at
the well or bulk purchase at pipeline and terminal facilities and
subsequent resale thereof.
“Business
Day” means any
day that is not a Saturday, a Sunday or other day on which banks
are required or authorized by law to be closed in the City of New
York.
“Capital
Account” means,
with respect to any Partner, a separate account established by the
Partnership and maintained for each Partner in accordance with
Section 3.4 hereof.
“Capital
Contribution” means, with respect to any Partner, the amount
of money and the initial Gross Asset Value of any Property (other
than money) contributed to the Partnership with respect to the
interests purchased by such Partner pursuant to the terms of this
Agreement, in return for which the Partner contributing such
capital shall receive a Partnership Interest.
“ Cause ”
shall have the meaning set forth in the Flores Employment
Agreement.
“Certificate ” means the Certificate of Limited
Partnership of the Partnership filed with the Secretary of State of
Delaware, as amended or restated from time to time.
“Code” means the United States Internal Revenue Code of
1986, as amended.
“ Contributed
Units ” means the subordinated units in the Master
Limited Partnership contributed to the Partnership in proportion to
the Unit Percentages.
“Depreciation”
means, for each Taxable Year or
other period, an amount equal to the depreciation, amortization or
other cost recovery deduction allowable with respect to an asset
for such Taxable Year, except that if the Gross Asset Value of an
asset differs from its adjusted basis for federal income tax
purposes at the beginning of such Taxable Year, Depreciation shall
be an amount which bears the same ratio to such beginning Gross
Asset Value as the federal income
tax depreciation, amortization or other cost
recovery deduction for such Taxable Year bears to such beginning
adjusted tax basis; provided, however, that if the adjusted basis
for federal income tax purposes of an asset at the beginning of
such Taxable Year is zero, Depreciation shall be determined with
reference to such beginning Gross Asset Value using any reasonable
method selected by the General Partner.
“ E-Holdings
” means E-Holdings, III L.P., a Texas limited
partnership.
“EnCap” shall have the meaning set forth in Section
10.1 .
“Encumbrance”
means any security interest, pledge,
mortgage, lien (including, without limitation, environmental and
tax liens), charge, encumbrance, adverse claim, any defect or
imperfection in title, preferential arrangement or restriction,
right to purchase, right of first refusal or other burden or
encumbrance of any kind, other than those imposed by this
Agreement.
“First Refusal
Notice” shall
have the meaning set forth in Section 7.8(a)
.
“First
Union” shall
have the meaning set forth in Section 7.1 .
“ Flores Employment
Agreement ” means the Employment Agreement dated May
8, 2001 between Rodeo and JCF.
“General
Partner” means
Plains All American GP LLC, a Delaware limited liability company,
any successor thereto, and any Persons hereafter admitted as
additional general partners, each in its capacity as a general
partner of the Partnership.
“ Good Reason
” shall have the meaning set forth in the Flores Registration
Rights Agreement.
“Gross Asset
Value” means
with respect to any asset, the asset’s adjusted basis for
federal income tax purposes, except as follows and as otherwise
provided in Section 3.2(b) :
(a)
The initial Gross Asset Value of any asset contributed by a Partner
to the Partnership shall be the gross fair market value of such
asset, as reasonably determined by the General Partner; provided,
however, that the initial Gross Asset Values of the assets
contributed to the Partnership pursuant to Section 3.1
hereof shall be as set forth in such section or the schedule
referred to therein;
(b)
The Gross Asset Values of all Partnership assets shall be adjusted
to equal their respective gross fair market values (taking Code
Section 7701(g) into account), as reasonably determined by the
General Partner as of the following times: (i) the acquisition of
an additional interest in the Partnership by any new or existing
Partner in exchange for more than a de minimis Capital
Contribution; (ii) the distribution by the Partnership to a Partner
of more than a de minimis amount of Partnership property as
consideration for an interest in the Partnership; and (iii) the
liquidation of the Partnership within the meaning of Regulation
Section 1.704-1(b)(2)(ii)(g); and
(c)
The Gross Asset Value of any item of Partnership assets distributed
to any Partner shall be adjusted to equal the gross fair market
value (taking Code Section 7701(g) into account) of such asset on
the date of distribution as reasonably determined by the General
Partner.
If the Gross Asset Value of an asset
has been determined or adjusted pursuant to subparagraph (b), such
Gross Asset Value shall thereafter be adjusted by the Depreciation
taken into account with respect to such asset, for purposes of
computing Profits and Losses.
“Hydrocarbons”
means crude oil, natural gas,
casinghead gas, condensate, sulphur, natural gas liquids, plant
products, liquefied petroleum gas and other liquid or gaseous
hydrocarbons produced in association therewith, including, without
limitation, coalbed methane and gas and CO 2
.
“JCF” means James C. Flores.
“Kafu” means KAFU Holdings LP, a Delaware limited
partnership.
“Kayne
Anderson” shall
have the meaning set forth in Section 10.1 .
“Limited
Partner” means
any Person admitted to the Partnership as a Limited Partner and who
is shown as such on the books and records of the
Partnership.
“Limited Partnership
Interest” means, with respect to a Member, such
Member’s limited partnership interest in the Partnership,
which refers to all of such Member’s rights and interests in
the Partnership in such Member’s capacity as a limited
partner thereof, all as provided in the Partnership Agreement and
the Delaware Revised Uniform Limited Partnership Act.
“Liquidating
Trustee” has
the meaning set forth in Section 8.3(a) .
“LLC
Agreement ”
means the Amended and Restated Agreement Limited Liability Company
Agreement of the General Partner, dated as of the date hereof, by
and among Plains All American Inc., as the initial member, Sable,
Kafu, E-Holdings, Management Entity, Raymond, Strome, Strome
Hedgecap and any other Persons who become members in the General
Partner as provided therein, as amended from time to time in
accordance with the terms thereof.
“Losses” has the meaning set forth in the definition of
“Profits” and “Losses”.
“ Management
Entity ” shall mean PAA Management, L.P.
“ Management
Sale ” shall have the meaning set forth in Section
7.9 .
“Master Limited
Partnership” means Plains All American Pipeline, L.P., and
any successor thereto.
“Master Limited
Partnership Agreement” means the Second Amended and Restated Agreement
of Limited Partnership of the Master Limited Partnership, dated as
of November 23, 1998, as amended, modified, supplemented or
restated from time to time in accordance with the terms
thereof.
“Member” means a record holder of a Membership
Interest.
“Membership
Interest” means, with respect to a Partner, such
Partner’s limited liability company interest in the General
Partner, which refers to all of such Partner’s rights and
interests in the General Partner in such Partner’s capacity
as a member thereof, all as provided in the LLC Agreement and the
Delaware Limited Liability Company Act.
“Membership
Transfer” shall
have the meaning set forth in Section 7.1(b) .
“Non-Purchasing
Partner” shall
have the meaning set forth in Section 7.8(d) .
“Non-Selling
Partner” shall
have the meaning set forth in Section 7.8(b)
.
“Notice” means a writing, containing the information
required by this Agreement to be communicated to a party, and shall
be deemed to have been received (a) when personally delivered or
sent by telecopy, (b) one day following delivery by overnight
delivery courier, with all delivery charges pre-paid, or (c) on the
third Business Day following the date on which it was sent by
United States mail, postage prepaid, to such party at the address
or fax number, as the case may be, of such party as shown on the
records of the Partnership.
“Offer” shall have the meaning set forth in
Section 7.8(a) .
“Offeror”
shall have the meaning set forth in
Section 7.8(a) .
“Option” means an option to purchase Contributed Units
granted pursuant to the Option Plan, as amended.
“Option
Plan” means the
Plains All American 2001 Performance Option Plan, as amended, and
any successor employee incentive plan funded with Contributed
Units.
“Optioned
Interest” shall
have the meaning set forth in Section 7.8(a)
.
“Partner”
means the General Partner or any of
the Limited Partners, and “Partners” means the General
Partner and all of the Limited Partners.
“Partnership”
shall have the meaning set forth in
the preamble hereof.
“Partnership
Interest” means
a Partner’s limited partnership or general partnership
interest in the Partnership which refers to all of a
Partner’s rights and interests in the Partnership in such
Partner’s capacity as a Partner, all as provided in this
Agreement and the Act.
“Partnership
Percentage” of
a Partner means the aggregate percentage of Partnership Interests
of such Partner set forth in Schedule I hereto, as the same
may be modified from time to time as provided herein.
“Permitted
Transfer” shall
mean:
(a)
a Transfer of any or all of the Partnership Interest by any Partner
who is a natural person to (i) such Partner’s spouse,
children (including legally adopted children and stepchildren),
spouses of children or grandchildren or spouses of grandchildren;
(ii) a trust for the benefit of the Partner and/or any of the
Persons described in clause (i); or (iii) a limited partnership or
limited liability company whose sole partners or members, as the
case may be, are the Partner and/or any of the Persons described in
clause (i) or clause (ii); provided , that in any of clauses
(i), (ii) or (iii), the Partner transferring such Partnership
Interest, or portion thereof, retains exclusive power to exercise
all rights under this Agreement;
(b)
a Transfer of any or all of the Partnership Interest by any Partner
to the Partnership;
(c)
a Transfer of any or all of the Partnership Interest by a Partner
to any Affiliate of such Partner; provided, however , that
such transfer shall be a Permitted Transfer only so long as such
Partnership Interest, or portion thereof, is held by such Affiliate
or is otherwise transferred in another Permitted
Transfer.
Provided, however
, that no Permitted Transfer shall
be effective unless and until the transferee of the Partnership
Interest, or portion thereof, so transferred complies with
Sections 7.1(b) . Except in the case of a Permitted
Transfer pursuant to clause (b) above, from and after the date on
which a Permitted Transfer becomes effective, the Permitted
Transferee of the Partnership Interest, or portion thereof, so
transferred shall have the same rights, and shall be bound by the
same obligations, under this Agreement as the transferor of such
Partnership Interest, or portion thereof, and shall be deemed for
all purposes hereunder a Partner and such Permitted Transferee
shall, as a condition to such Transfer, agree in writing to be
bound by the terms of this Agreement. No Permitted Transfer
shall conflict with or result in any violation of any judgment,
order, decree, statute, law, ordinance, rule or regulation or
require the Company, if not currently subject, to become subject,
or if currently subject, to become subject to a greater extent, to
any statute, law, ordinance, rule or regulation, excluding matters
of a ministerial nature that are not materially burdensome to the
Company.
“Permitted
Transferee” shall mean any Person who shall have acquired
and who shall hold a Partnership Interest, or portion thereof,
pursuant to a Permitted Transfer.
“Person
” means any individual,
partnership, corporation, limited liability company, trust,
incorporated or unincorporated organization or other legal entity
of any kind.
“Profits”
and
“Losses” means, for each Taxable Year, an
amount equal to the Partnership’s net taxable income or loss
for a taxable year, determined in accordance with Section 703(a) of
the Code (for this purpose, all items of income, gain, loss or
deduction required
to be stated separately pursuant to Section
703(a)(1) of the Code shall be included in computing such taxable
income or loss), with the following adjustments:
(a)
Any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Profits or
Losses shall be added to such taxable income or loss;
(b)
Any expenditures of the Partnership described in Section
705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Regulation Section 1.704-1(b)(2)(iv)(i),
and not otherwise taken into account in computing Profits or
Losses, shall be subtracted from such taxable income or
loss;
(c)
In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to subparagraphs (b) or (c) of the definition of
Gross Asset Value, the amount of such adjustment shall be treated
as an item of gain (if the adjustment increases the Gross Asset
Value of the asset) or an item of loss (if the adjustment decreases
the Gross Asset Value of the asset) from the disposition of such
asset and shall be taken into account for purposes of computing
Profits or Losses;
(d)
Gain or loss resulting from any disposition of Property with
respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Gross Asset Value of
the Property disposed of, notwithstanding that the adjusted tax
basis of such Property differs from its Gross Asset
Value;
(e)
In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such
Taxable Year, computed in accordance with the definition of
Depreciation; and
(f)
To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) or Code Section
743(b) is required, pursuant to Regulation Sections
1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining
Capital Accounts as a result of a distribution other than in
liquidation of a Partner’s interest in the Partnership, the
amount of such adjustment shall be treated as an item of gain (if
the adjustment increases the basis of the asset) or loss (if the
adjustment decreases such basis) from the disposition of such asset
and shall be taken into account for purposes of computing Profits
or Losses.
“Property”
means all assets, real or
intangible, that the Partnership may own or otherwise have an
interest in from time to time.
“Raymond”
means John T. Raymond.
“Regulations”
means the regulations, including
temporary regulations, promulgated by the United States Department
of Treasury with respect to the Code, as such regulations are
amended from time to time, or corresponding provisions of future
regulations.
“Regulatory
Allocations” shall have the meaning set forth in
Section 5.3(c) .
“Rodeo” means Plains Resources Inc., a Delaware
corporation.
“Rodeo,
Inc.” means
Plains All American Inc., a Delaware corporation.
“Sable” means Sable Investments, L.P.
A “Sable Change of
Control” shall be deemed to occur if: any Person or
“Group” (as such term is used in Section 13(d) of the
Exchange Act), other than JCF or any entity or entities controlled
by JCF, is or becomes the “beneficial owner” (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act) of (a)
more than 50% of the general or limited partnership interests in
Sable or (b) stock or other equity interests of any legal entity
that controls Sable representing more than 50% of the voting
interests entitled to vote generally for the election of the board
of directors or other governing body of such entity.
“Selling
Partner” shall
have the meaning set forth in Section 7.8(a)
.
“Special
Disposition” means (i) the delivery of Contributed Units upon
the exercise of an Option when the exercise price is paid in cash,
(ii) the sale of Contributed Units in a “cashless”
exercise of an Option, but only to the extent the proceeds of such
sale satisfy the exercise price, (iii) in the case of the exercise
of an Option in which the exercise price is satisfied by
“netting” the units delivered to the optionee, the sale
of Contributed Units equal in number to the netted units, (iv) the
sale of Contributed Units with a value substantially equivalent to
the deemed aggregate exercise price for any Options cancelled and
paid in cash, and (iv) any other disposition of Contributed Units
reasonably attributable to the payment of the exercise price of an
Option.
“Strome”
means Mark E. Strome.
“Strome
Hedgecap” means
Strome Hedgecap Fund, L.P.
“Taxable
Year” shall
mean the calendar year.
“Transfer”
or
“Transferred” means to give, sell,
exchange, assign, transfer, pledge, hypothecate, bequeath, devise
or otherwise dispose of or encumber, voluntarily or involuntarily,
by operation of law or otherwise. When referring to a
Partnership Interest, “Transfer” shall mean the
Transfer of such Partnership Interest whether of record,
beneficially, by participation or otherwise.
“Transfer
Agreements” means those certain Unit Transfer and
Contribution Agreements, dated as of May 8, 2001, by and among PAAI
LLC, Rodeo, Rodeo, Inc. and each of (i) Sable, Sable Holdings,
L.P. and JCF; (ii) E-Holdings, (iii) Kafu Holdings, LLC,
(iv) Strome, (v) Strome Hedgecap and (vi) Raymond,
as may be amended from time to time in accordance with the terms
thereof.
“Unit
Percentages” means the Unit Percentages set forth on Schedule
I.
ARTICLE II
ORGANIZATION
2.1
Formation of Limited Partnership
The General
Partner has previously formed the Partnership as a limited
partnership pursuant to the provisions of the Act and the parties
hereto hereby agree to amend and restate the original Limited
Partnership Agreement of the Partnership in its entirety. The
parties hereto acknowledge that they intend that the Partnership be
taxed as a partnership and not as an association taxable as a
corporation for federal income tax purposes. No election may
be made to treat the Partnership as other than a partnership for
federal income tax purposes.
2.2
Name of Partnership
The name of the Partnership is
Plains AAP, L.P. or such other name as the General Partner may
hereafter adopt from time to time. The General Partner shall
execute and file in the proper offices such certificates as may be
required by any assumed name act or similar law in effect in the
jurisdictions in which the Partnership may elect to conduct
business.
2.3
Principal Office; Registered Office
The principal
office address of the Partnership is located at 333 Clay
Street, 29th Floor, Houston, Texas 77002, or such other place
as the General Partner designates from time to time. The
registered office address and the name of the registered agent of
the Partnership for service of process on the Partnership in the
State of Delaware is as stated in the Certificate or as designated
from time to time by the General Partner.
2.4
Term of Partnership
The term of the Partnership
commenced on May 21, 2001 and shall continue until dissolved
pursuant to Section 8.1 hereof. The legal
existence of the Partnership as a separate legal entity continues
until the cancellation of the Certificate.
2.5
Purpose of Partnership
The Partnership is formed for the
object and purpose of, and the nature of the business to be
conducted and promoted by the Partnership is, (a) acting as
the general partner of the Master Limited Partnership pursuant to
the Master Limited Partnership Agreement, (b) holding the GP
Interest, the Incentive Distribution Rights and the Operating
Partnerships GP Interests (as such terms are defined in the
Transfer Agreement) and (c) engaging in any and all activities
necessary or incidental to the foregoing.
2.6
Actions by Partnership
The Partnership may execute, deliver
and perform all contracts, agreements and other undertakings and
engage in all activities and transactions as may in the opinion of
the General Partner be necessary or advisable to carry out its
objects.
2.7
Reliance by Third Parties
Persons dealing with the Partnership
are entitled to rely conclusively upon the power and authority of
the General Partner as herein set forth.
ARTICLE III
CAPITAL
3.1
Capital Contributions
(a)
On or before the date of this Agreement, each Partner agrees to
make, or shall have made, a Capital Contribution consisting of cash
or property as set forth opposite such Partner’s name on
Schedule I hereto.
(b)
Each Partner agrees to make Capital Contributions in proportion to
such Partner’s Partnership Percentage for equity issuances by
the Master Limited Partnership pursuant to Section 5.2(b) of the
Master Limited Partnership Agreement approved by the Members
pursuant to the LLC Agreement.
3.2
Additional Capital Contributions
(a)
No Partner shall be required to make any additional Capital
Contribution other than as required under Section 3.1
.
(b)
The Partnership may offer additional Partnership Interests to any
Person with the approval of the General Partner. If any
additional Capital Contributions are made by Partners but not in
proportion to their respective Percentage Interests, the Percentage
Interest of each Partner shall be adjusted such that each
Partner’s revised Percentage Interest determined immediately
following each such additional Capital Contribution shall be equal
to a fraction (i) the numerator of which is the sum of
(A) the positive Capital Account balance of the Partner
determined immediately preceding the date such additional Capital
Contribution is made (such Capital Account to be computed by
adjusting the book value for Capital Account purposes of each
Partnership asset to equal its Gross Asset Value as of such date,
as provided in subparagraph (b) of the definition herein of
“Gross Asset Value”), and (B) such additional
Capital Contribution, if any, made by such Partner, and
(ii) the denominator of which is the sum of the positive
Capital Account balances immediately preceding the date such
additional Capital Contribution is made plus additional Capital
Contributions of all Partners on the date of such additional
Capital Contribution, including Capital Contributions of any new
Partners (in each case calculated as provided in (i) above).
The names, addresses and Capital Contributions of the Partners
shall be reflected in the books and records of the
Partnership.
3.3
Loans
(a)
No Partner shall be obligated to loan funds to the
Partnership. Loans by a Partner to the Partnership shall not
be considered Capital Contributions. The amount of any such
loan shall
be a debt of the Partnership
owed to such Partner in accordance with the terms and conditions
upon which such loan is made.
(b)
A Partner may (but shall not be obligated to) guarantee a loan
made to the Partnership. If a Partner guarantees a loan made
to the Partnership and is required to make payment pursuant to such
guarantee to the maker of the loan, then the amounts so paid to the
maker of the loan shall be treated as a loan by such Partner to the
Partnership and not as an additional Capital
Contribution.
3.4
Maintenance of Capital Accounts
(a)
The Partnership shall maintain for each Partner a separate Capital
Account with respect to the Partnership Interest owned by such
Partner in accordance with the following provisions:
(i)
To each Partner’s Capital Account there shall be credited
(A) such Partner’s Capital Contributions, (B) such
Partner’s share of Profits and (C) the amount of any
Partnership liabilities assumed by such Partner or which are
secured by any Property distributed to such Partner. The
principal amount of a promissory note which is not readily traded
on an established securities market and which is contributed to the
Partnership by the maker of the note (or a Partner related to the
maker of the note within the meaning of Regulation Section
1.704-1(b)(2)(ii)(c)) shall not be included in the Capital
Account of any Partner until the Partnership makes a taxable
disposition of the note or until (and only to the
extent) principal payments are made on the note, all in
accordance with Regulation Section
1.704-1(b)(2)(iv)(d)(2);
(ii)
To each Partner’s Capital Account there shall be debited
(A) the amount of money and the Gross Asset Value of any
Property distributed or treated as an advance distribution to such
Partner pursuant to any provision of this Agreement (including
without limitation any distributions pursuant to
Section 4.1) , (B) such Partner’s share of
Losses and (C) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any Property
contributed by such Partner to the Partnership;
(iii)
In the event Partnership Interests are Transferred in accordance
with the terms of this Agreement, the transferee shall succeed to
the Capital Account of the transferor to the extent such Capital
Account relates to the Transferred Partnership Interests;
and
(iv)
In determining the amount of any liability for purposes of
Sections 3.4(a)(i) and (ii) there shall be taken into
account Code Section 752(c) and any other applicable
provisions of the Code and Regulations.
(b)
The foregoing Section 3.4(a) and the other provisions of
this Agreement relating to the maintenance of Capital Accounts are
intended to comply with Regulation Section 1.704-1(b) and, to the
greatest extent practicable, shall be interpreted and applied in a
manner consistent with such Regulation. The General Partner
in its discretion and to the extent otherwise consistent with the
terms of this Agreement shall (i) make any adjustments that
are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of
capital reflected on the
Partnership’s balance sheet, as computed for book purposes,
in accordance with Regulation Section 1.704-1(b)(2)(iv)(q), and
(ii) make any appropriate modifications in the event
unanticipated events might otherwise cause this Agreement not to
comply with Regulation Section 1.704-1(b).
3.5
Capital Withdrawal Rights, Interest and Priority
Except as expressly provided in this
Agreement, no Partner shall be entitled to (a) withdraw or
reduce such Partner’s Capital Contribution or to receive any
distributions from the Partnership, or (b) receive or be
credited with any interest on the balance of such Partner’s
Capital Contribution at any time.
ARTICLE IV
DISTRIBUTIONS
4.1
Distributions of Available Cash
An amount equal to 100% of Available
Cash with respect to each fiscal quarter of the Partnership shall
be distributed to the Partners in proportion to their relative
Percentage Interests within forty-five days after the end of such
quarter. Notwithstanding any other provision of this
Agreement, all (i) distributions attributable to the ownership by
the Partnership of Contributed Units and (ii) proceeds of any
Special Disposition shall be distributed to the Partners in
proportion to their relative Unit Percentages within forty-five
days after the end of each quarter. The General Partner may
in its discretion dispose of any or all of the Contributed Units in
connection with the administration of the Option Plan, including
without limitation any exercise of cancellation of an Option or any
termination of the Plan. Proceeds of any Special Disposition
shall be distributed in accordance with this Section 4.1.
Proceeds of any other disposition of Contributed Units may be
disbursed at the discretion of the General Partner.
4.2
Special Distribution
Upon the closing of the transactions
contemplated by the Transfer Agreements, the Partnership shall make
a special distribution to Rodeo, Inc. in an amount equal to the
amount contributed by the Limited Partners other than Rodeo, Inc.
for their limited partner Partnership Interests hereunder on or
before the date of such closing.
4.3 &
